Make Sure There' S No Pre- Payment Penalty

A Bi- Weekly Mortgage can save big money!

This simple method of making your payment will dramatically pay down the mortgage. saving several years worth of payments. Do you know that after paying 15 years on a 30- year mortgage, you can still owe 90% of the amount that was borrowed? Paying bi- weekly doesn' t mean paying your mortgage twice a month- it means dividing the payment in half and paying that amount every two weeks. Utilizing a bi- weekly payment schedule will cut years off your mortgage term and quickly increase the equity in your home. And what a difference it will make! How does it work?

Instead of making a monthly mortgage payment. you make a payment every two weeks. It's really very simple! This automatically adds an extra payment every year, which really reduces the principal on your loan. Your principal and interest payment would be approximately$ 665 monthly. For example, let's use a$ 100, 000 mortgage at 7% interest. Cut this in half and pay$ 3350 every two weeks.

It's unbelievable that this would reduce your 30- year mortgage to a 23- year loan. saving almost$ 35, 000 in the process, isn' t it? You will then have one extra payment at the end of the year to apply directly to your principal. The larger the loan, the more dramatic the savings will be. Ask about their options for a bi- weekly mortgage. If you are interested in having a bi- weekly mortgage, call your lender and ask for the cash management department. or someone that can help with payment inquiries. But always make sure that the extra payment is applied directly to your principal balance. (It wouldn' t hurt to keep a record of the call and the person's name that you spoke with. just for future reference) . Another way to pay off your mortgage early is to look at your amortization schedule and determine how much of any given payment is being applied to your principal.

If your lender doesn' t have a provision for this option, contact us and we can help with more ways of paying off your mortgage early. Just add that small amount to your monthly payment and you will begin to see a decrease in your principal balance. But paying even this tiny amount can make a huge difference in the term of your loan. For many years, the amount being applied to your principal will be very small indeed. Remember to always read the fine print in your loan documents. And if there is a penalty, many times it's only for a certain number of years.

Make sure there's no pre- payment penalty. Usually, they will allow you to pay off a certain percentage of your principal balance on a yearly basis before any pre- payment penalty applies. And a bi- weekly loan amortization program will also pay off- big time! Doing your research will really pay off. Remember, you' re paying the same payment amount. but breaking it down into two smaller payments. The savings will be yours!

It just takes a bit more bookkeeping.